Bob Palmer Testifies at the Ohio Insurance & Financial Institutions Committee

  

 

  OHIO SENATE INSURANCE AND FINANCIAL INSTITUTIONS COMMITTEE

 

The Ohio Senate

February 27, 2013

 

Briefing From The

COMMUNITY BANKERS ASSOCIATION OF OHIO

 

 

Good afternoon Chairman Hughes, Vice-Chairman Bacon, Ranking Member Turner and members of the committee.

 

My name is Robert L. Palmer. I am President and Chief Executive Officer of the Community Bankers Association of Ohio (CBAO).  CBAO’s sole purpose is to exclusively represent the interests of Ohio’s 218 community banks who serve their communities through 1,229 locations with over 14,600 employees, with more than $59 billion in assets, $46 billion in insured deposits, and $39 billion in net loans.

 

Personally I have had the privilege of being a part of the community banking industry for almost 40 years having served in positions ranging from teller to executive positions as President and Chief Executive Officer of two different community banks, and a director of four different community banks.

 

At CBAO we believe we are more than just an association as we were organized to establish and maintain an informed network of independent community banks in the state of Ohio that will have the influence and commitment to effectively serve, protect and promote the interest of the community banking industry.  We are always looking to the future as we realize that we cannot change the past. In the 38 years of our existence, much has changed, but we still remain focused on our original mission of increasing the value of independent financial institutions.

 

In December, 1973, four Ohio community bankers met to discuss the possibility of establishing an association for the independent community banks of Ohio. At that time, there was a tremendous amount of merger activity occurring in the state. These four community bankers realized that one of the most important benefits of an association would be group purchasing to obtain products and services at a competitive price. Group purchasing strength would allow community banks to remain competitive, slow the merger rate, and preserve a strong community bank presence in Ohio. CBAO and its subsidiaries continue the mission of keeping community banks competitive while preserving a strong community bank presence in Ohio. We continue to offer the highest quality products and services, ranging from insurance to credit cards, with negotiated discount and fee income opportunities, which increase our community banks’ bottom line. We offer unique and useful networking opportunities through our regional meetings and our annual convention and trade show. We offer to our community banks high quality education and training seminars and web casts.

 

CBAO maintains a strong legislative and regulatory focus in Ohio and Washington D.C. Jon D. Myers and Associates has represented CBAO for the last 7 years. As a former member of the Ohio General Assembly, Jon and his associates bring a wealth of knowledge to our organization and the legislative process.

 

In Washington DC, we partner with The Independent Community Bankers of America, the nation’s voice for nearly 7000 community banks of all sizes and charter types. ICBA also is dedicated exclusively to representing the interests of the community banking industry, with nearly 5000 community banks, representing 24,000 locations nationwide and employing 300,000 Americans. ICBA community banks hold $1.2 trillion in deposits and $750 billion in loans to consumers, small businesses and the agricultural community.

 

Many of you may ask what a community bank is and that is a fair question. Generally, community banks have assets of $10 billion or less, (most community banks range in assets from $100 million to $400 million). The criterion to be designated as a community bank is as follows:

 

• Must be operated under the control and direction of an independent management team with decision-making ability in the communities that they serve.

 

• Must have a primary focus of investing local deposits and making loans for the financial and social betterment of the communities that they serve.

 

• They focus attention on the needs of local families, small businesses, and farmers.

 

• They are known for their quality service and personal attention.

 

• They offer nimble decision-making on loans as they consider character, family history and discretionary spending instead of relying solely on impersonal criteria such as credit scoring.

 

• Must be a commercial bank, savings bank, mutual bank, or a savings and loan association.

 

• Must have an independent bank charter from at least one of the appropriate regulatory agencies.

 

• Must be insured by the Federal Deposit Insurance Corporation. (FDIC).

 

• Must represent and promote the independent community bank philosophy.

 

Community bankers are very involved in their communities, often serving on the local school board, volunteering on the fire department, or actively volunteering in their local service clubs.

 

The community bank business model is significantly different from other banks.  We focus on the unique needs of our communities, build strong customer relationships which help attract local retail deposits, take deposits from our local communities and recycle them back in the form of loans.  There is no denying that community banks are the engine that drives the economic growth in our communities across Ohio.

 

CBAO works with legislators and regulators to recognize these differences.  Community banks cannot and should not be required to meet the same requirements of the larger more complex banks as we strongly believe that, “one size cannot and does not fit all.”

 

Mr. Chairman and members of the committee, thank you for allowing me the opportunity to provide an overview of CBAO and the community banking industry and the unique role we play in our communities and Ohio’s economy.

 

I would be pleased to answer any questions you may have.